Controller’s audit rips Stockton leaders

Wednesday

Jul 31, 2013 at 11:42 AMJul 31, 2013 at 5:09 PM

STOCKTON — State Controller John Chiang’s long-awaited audit of Stockton’s finances issues harsh words to city leaders who, the report says, should have seen the warning signs of trouble that sent Stockton into bankruptcy.

The Record

STOCKTON — State Controller John Chiang’s long-awaited audit of Stockton’s finances issues harsh words to city leaders who, the report says, should have seen the warning signs of trouble that sent Stockton into bankruptcy.

A confidential draft report of the audit obtained by The Record exposes inadequate safeguards in Stockton’s financial landscape that still may not have been addressed today. Of 79 accounting controls investigated, 61 percent were ineffective, the probe found.

“We found that the potential for waste, fraud, and abuse of public resources is extremely high due to numerous deficiencies,” Jeffrey Brownfield, chief auditor for Chiang’s office, said in a cover letter to Stockton.

The state audit — launched over a year ago, before Stockton filed bankruptcy — focused on a snapshot of Stockton’s accounting practices in the fiscal year of 2010-2011. A chief finding blames the city’s former internal auditor for pursuing issues of little significance.

Read Thursday’s Record for more on this story by staff writer Scott Smith.